Financial Risk Manager Part 1
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A long position in a FRA 2 × 5 is equivalent to the following positions in the spot market:
A
Borrowing in two months to finance a five-month investment.
B
Borrowing in five months to finance a two-month investment.
C
Borrowing half a loan amount at two months and the remainder at five months.
D
Borrowing in two months to finance a three-month investment.